Votes

Memo

TITLE OF BILL: An act to amend the tax law, in relation to the franchise tax on business corporations

PURPOSE: To eliminate all business taxes on manufacturers to encourage the expansion of the manufacturing, sector in New York.

SUMMARY OF PROVISIONS:

ELIMINATING TAXES ON MANUFACTURERS: Over a three year period, the legislation would provide manufacturers throughout New York State with $495 million in tax relief- phasing out the taxes they pay under the State's Corporate Franchise Tax and Personal Income Tax. The first phase will begin for tax years beginning on January 1, 2014. This will save manufacturers $114 million in SFY 2013-14 and $495 million when fully phased in.

JUSTIFICATION: This bill will help create thousands of new private sector manufacturing jobs by delivering tax relief to existing New York manufacturers and encourage new manufacturers to locate in New York.

LEGISLATIVE HISTORY: S.7663 of 2012

FISCAL IMPLICATIONS: This bill will save New York businesses $114 million this year.

EFFECTIVE DATE: Effective immediately.

Text

STATE OF NEW YORK
________________________________________________________________________
3772
2013-2014 Regular Sessions
IN SENATE
February 14, 2013
___________

Introduced by Sen. SEWARD -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations
AN ACT to amend the tax law, in relation to the franchise tax on busi-
ness corporations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision 1 of section 209 of the tax law, as amended by
chapter 817 of the laws of 1987, is amended to read as follows:
1. For the privilege of exercising its corporate franchise, or of
doing business, or of employing capital, or of owning or leasing proper-
ty in this state in a corporate or organized capacity, or of maintaining
an office in this state, for all or any part of each of its fiscal or
calendar years, every domestic or foreign corporation, except corpo-
rations specified in subdivision four of this section, shall annually
pay a franchise tax, upon the basis of its entire net income base, or
upon such other basis as may be applicable as hereinafter provided, for
such fiscal or calendar year or part thereof, on a report which shall be
filed, except as hereinafter provided, on or before the fifteenth day of
March next succeeding the close of each such year, or, in the case of a
corporation which reports on the basis of a fiscal year, within two and
one-half months after the close of such fiscal year, and shall be paid
as hereinafter provided. PROVIDED HOWEVER, A MANUFACTURER AS DEFINED IN
SECTION TWO HUNDRED TEN OF THIS ARTICLE SHALL NOT BE SUBJECT TO TAX
UNDER THIS ARTICLE FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY
FIRST, TWO THOUSAND SIXTEEN; IF THE MANUFACTURER HAS ONE HUNDRED OR
FEWER EMPLOYEES AND LESS THAN ONE MILLION DOLLARS IN GROSS INCOME SUCH
MANUFACTURER SHALL NOT BE SUBJECT TO TAX UNDER THIS ARTICLE FOR TAXABLE
YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN; IF THE
MANUFACTURER HAS FIFTY OR FEWER EMPLOYEES AND LESS THAN FIVE HUNDRED
THOUSAND DOLLARS IN GROSS INCOME SUCH MANUFACTURER SHALL NOT BE SUBJECT

EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08383-01-3

S. 3772 2

TO TAX UNDER THIS ARTICLE FOR TAXABLE YEARS BEGINNING ON OR AFTER JANU-
ARY FIRST, TWO THOUSAND FOURTEEN.
S 2. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 39 to read as follows:
(39) IN THE CASE OF A TAXPAYER WHO IS A PROPRIETOR OF, A PARTNER IN,
AN S-CORPORATION SHAREHOLDER OF, A LIMITED LIABILITY COMPANY MEMBER OF
OR A LIMITED LIABILITY COMPANY MEMBER OF, A BUSINESS THAT IS A MANUFAC-
TURER, AS THE TERM IS DEFINED IN SUBPARAGRAPH (VI) OF PARAGRAPH (A) OF
SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE, TO THE
EXTENT INCLUDED IN FEDERAL GROSS INCOME FOR THE TAXABLE YEAR, BUSINESS
INCOME OR SHARE OF BUSINESS INCOME FROM SUCH MANUFACTURING BUSINESS FOR
TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN,
PROVIDED HOWEVER IF SUCH BUSINESS THAT IS A MANUFACTURER HAS ONE HUNDRED
OR FEWER EMPLOYEES AND LESS THAN ONE MILLION DOLLARS IN BUSINESS INCOME,
THIS PARAGRAPH SHALL BE APPLICABLE FOR TAXABLE YEARS BEGINNING ON OR
AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, FURTHER PROVIDED HOWEVER IF
SUCH BUSINESS THAT IS A MANUFACTURER HAS FIFTY OR FEWER EMPLOYEES AND
LESS THAN FIVE HUNDRED THOUSAND DOLLARS IN BUSINESS INCOME THIS PARA-
GRAPH SHALL BE APPLICABLE FOR TAXABLE YEARS BEGINNING ON OR AFTER JANU-
ARY FIRST, TWO THOUSAND FOURTEEN.
S 3. This act shall take effect immediately.

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